PajMon Information Blog

Posts Tagged ‘loan modification programs’

In this difficult economic environment, the debt consolidation industry is growing rapidly. Everyday more people are being laid off, this is the worst economy since the Great Depression in the 1930s. Many people have found themselves in the position of not being able to meet their monthly expenses, and have debt collectors hounding them. Often, debt consolidation services can be the solution you are seeking. But make sure to research the companies you are considering doing business with. Unfortunately, as the number of people seeking help has grown, so have the number of people looking to make money out of the situation.

If you are one of the many people today who are in the situation of having too much debt and are looking for help, debt consolidation could be a good option. Youll need to do a little research to ensure that you dont get pulled into a scam.

As you are investigating your options, you will be looking for quotes. The very first thing you need to do is keep your private information private. If you are getting a quote from a debt consolidator, the only information you need to provide them with is the list of your creditors, the balances you have with them, and the interest rates you are being charged. You do not have to provide them with your social security number, account numbers, or other private information at this time. By giving them this information you are opening yourself to the nightmare of identity theft. Once youve signed on the dotted line, you will need to provide this information, but for the purposes of the quote, it is not necessary. As for the quote itself, you should not be asked to pay for the quote. If the company is looking to charge you at this point, move along.

If one company is offering a significantly lower monthly payment, it is more than likely that they are charging you significantly higher interest. Higher interest rates generally wind up costing more over the long term. You need to remember to also keep all fees in mind when calculating the costs of one program over another. Is there an upfront fee or a fee built in to your monthly payment? Read the contract to look for hidden fees that might be incurred over time. It is important that you understand the terms of your contract. Are there cancellation fees? If you do cancel over time, how are fees refunded? What about settlement guarantees? Your contract should specify what percentage of the settlement is guaranteed. If it doesnt, dont sign.

Many debt consolidation companies pay their employees commissions, or offer incentives for new accounts signed. Dont let yourself be pushed into signing up with a debt consolidator upon your first contact with them. It is very important to calmly evaluate your options, something that is difficult to do when you are being offered the hard sell. No matter how pressing your credit situation, take your time and make sure to make the right decision.

Finally, before settling on a debt consolidation service, you need to do a little research on the companies you are considering. Find out if they are legitimate. Check with the Federal Trade commission and Better Business Bureau to see what kinds of complaints have been filed against the company and how many. If you see complaints mounting into the high double digits, youll do better off elsewhere. Call your State Attorney Generals Office, they can provide you with useful information about the company as well. Chances are, if the company is not reputable, youll know that from these three sources. You will also want to do a google or yahoo search on the specific debt consolidators you are considering to see what others have experienced. If theres a problem, youll find out quickly.

Remember, if you are pressured into signing up with a company because of a hard sell, you may find yourself with an even bigger problem than you had going into this. Take the time to evaluate the companies you are considering and what they are offering. Read everything carefully. If you dont understand something get clarification. Know what you are agreeing to before you sign. And if you find that you are unable to make heads or tails of the situation, dont be afraid to seek the advice of an independent financial expert.